Is IVZ Stock A Buy or Sell?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Invesco Ltd. (NYSE:IVZ) changed recently.

Is IVZ stock a buy? Money managers were in an optimistic mood. The number of long hedge fund bets improved by 13 recently. Invesco Ltd. (NYSE:IVZ) was in 34 hedge funds’ portfolios at the end of December. The all time high for this statistic is 38. Our calculations also showed that IVZ isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to check out the recent hedge fund action surrounding Invesco Ltd. (NYSE:IVZ).

Do Hedge Funds Think IVZ Is A Good Stock To Buy Now?

At the end of December, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 62% from the previous quarter. By comparison, 24 hedge funds held shares or bullish call options in IVZ a year ago. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Trian Partners, managed by Nelson Peltz, holds the largest position in Invesco Ltd. (NYSE:IVZ). Trian Partners has a $640.4 million position in the stock, comprising 9.5% of its 13F portfolio. On Trian Partners’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $84.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions contain Richard S. Pzena’s Pzena Investment Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Invesco Ltd. (NYSE:IVZ), around 9.48% of its 13F portfolio. Full18 Capital is also relatively very bullish on the stock, earmarking 1.96 percent of its 13F equity portfolio to IVZ.

Consequently, some big names have been driving this bullishness. Full18 Capital, managed by Allon Hellmann, established the most outsized position in Invesco Ltd. (NYSE:IVZ). Full18 Capital had $4.5 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $4 million position during the quarter. The following funds were also among the new IVZ investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Michael Price’s MFP Investors, and Mario Gabelli’s GAMCO Investors.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Invesco Ltd. (NYSE:IVZ) but similarly valued. These stocks are Assurant, Inc. (NYSE:AIZ), Levi Strauss & Co. (NYSE:LEVI), Fate Therapeutics Inc (NASDAQ:FATE), Mobile TeleSystems Public Joint Stock Company (NYSE:MBT), Ionis Pharmaceuticals, Inc. (NASDAQ:IONS), Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR), and II-VI, Inc. (NASDAQ:IIVI). All of these stocks’ market caps are closest to IVZ’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $688 million. That figure was $937 million in IVZ’s case. Fate Therapeutics Inc (NASDAQ:FATE) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company (NYSE:MBT) is the least popular one with only 13 bullish hedge fund positions. Invesco Ltd. (NYSE:IVZ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IVZ is 86.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on IVZ as the stock returned 48.8% since the end of Q4 (through 4/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.